M M Forgings (522241) Q4 02/03 earnings summary

Executive summary

• FY ended Mar. 31, 2003 sales rose 7.8% to Rs. 8,315.85 lakh and profit after tax increased 6.4% to Rs. 654.47 lakh; directors recommended a 45% dividend.

• Domestic sales growth offset flat exports amid a global slowdown; exports remained 69% of total sales.

Financial highlights

• Profit before tax was Rs. 760.23 lakh versus Rs. 705.08 lakh; profit after tax was Rs. 654.47 lakh versus Rs. 605.08 lakh.

• Total expenditure increased to Rs. 7,635.48 lakh from Rs. 6,894.50 lakh; raw-material costs rose to Rs. 3,498.32 lakh from Rs. 2,721.13 lakh.

• Power and fuel costs rose to Rs. 989.99 lakh from Rs. 815.92 lakh; depreciation increased to Rs. 1,043.30 lakh from Rs. 915.40 lakh.

• Adjusted for the prior-year Rs. 118.61 lakh investment write-off, current-year PBT was Rs. 760.23 lakh versus prior-year reported PBT of Rs. 705.08 lakh.

Outlook and guidance

• Plans included moving the Guindy machine shop to the Padappai plant to rationalize operations and overhead costs.

• Additional product lines for machining forgings were expected in the coming months; further investment in wind power generation was also anticipated.

• Two Muppandal wind-farm phases were completed, with expected annual generation of 6 million kWh.